U.S. labor unions say NAFTA replacement does not go far enough for workers

NEW YORK/WASHINGTON (Reuters) - U.S. labor officials on Tuesday pressed lawmakers to strengthen enforcement of the provisions of the United States-Mexico-Canada Agreement (USMCA) intended to protect workers, the latest sign the trade deal could face hurdles to passage in the Democrat-led House of Representatives.

FILE PHOTO: Employees work on a printed circuit board at the assembly line of a factory that exports to the U.S. in Ciudad Juarez, Mexico, January 27, 2017. REUTERS/Jose Luis Gonzalez/File Photo

Renegotiation of the North American Free Trade Agreement (NAFTA) was one of President Donald Trump’s campaign promises and part of his broader push for better terms of trade for the United States. He has said bad deals cost millions of U.S. jobs.

Republican House members who met with Trump at the White House on Tuesday afternoon said they would work hard to pass the new agreement, calling it a better deal for U.S. workers than the 25-year-old NAFTA.

“Our farmers and our manufacturers and tech companies tell us that it’s crucial that we come together and pass this new agreement and get it to the president’s desk this summer,” said Representative Kevin Brady, the top Republican on the House Ways and Means Committee.

The Trump administration is lobbying to persuade Congress to ratify USMCA this year.

But representatives from some of the largest and most influential U.S. unions told members of the House Ways and Means trade subcommittee the reworked trade pact does not go far enough to ensure improvement of wages and working conditions, especially for Mexican workers.

“All the NAFTA renegotiation efforts in the world will not create U.S. jobs, raise U.S. wages or reduce the U.S. trade deficit if the new rules do not include clear, strong and effective labor rules that require Mexico to abandon its low wage policy,” said Celeste Drake of the American Federation of Labor and Congress of Industrial Organizations.

In late 2018, the leaders of the United States, Mexico and Canada signed the deal to replace NAFTA, but it has yet to be reviewed and ratified by Congress. Trade among the three countries totals more than $1 trillion.

Democrats, who took control of the House of Representatives in January, have traditionally been skeptical of free trade agreements and sympathetic to labor groups. Their support is essential to USMCA’s passage.

USMCA requires its three signatories to maintain labor laws in line with international standards, and to enforce them. But critics have called the agreement’s enforcement mechanism insufficient, saying it will still allow weak unions and resulting low wages in Mexico, while failing to stanch the flight of U.S. factories to lower-cost Mexico.

NAFTA, launched in 1994, put labor provisions in an unenforceable addendum to the agreement, allowing Mexican wages to stagnate despite a flood of factory investment from U.S. companies.

“The (USMCA) labor chapter is an improvement. The problem is the enforceability mechanism,” said Shane Larson, a director with the Communications Workers of America, advocating for reopening the agreement.

Autoworkers, too, are concerned about the new agreement, despite provisions aimed at requiring more vehicle value content produced in North America and in high-wage areas in the United States and Canada.

USMCA “takes some positive steps but doesn’t measure up to being able to make more good-paying jobs now and going forward,” said Josh Nassar, legislative director of the United Auto Workers union.

NAFTA led to decades of lost jobs for U.S. autoworkers, who watched factories close as manufacturers moved production to Mexico.

House Democrats have greeted USMCA coolly, telling U.S. Trade Representative Robert Lighthizer earlier this month about concerns over labor enforcement and provisions that could lock in higher drug prices.

“This agreement is a continuation of the assault on the American middle class,” Brian Higgins, a Democratic representative from New York, said at Tuesday’s hearing.

Reporting by Chris Prentice in New York and David Lawder and Jeff Mason in Washington; editing by Simon Webb, Steve Orlofsky and Tom Brown